Abstract
PROGRAMME AND PRESENTATIONS
The Seminar on Research in Energy Economics at Paris-Sciences-Lettres (PSL) is jointly organized by the CERNA (MINES PARIS TECH), the CGEMP (Université Paris-Dauphine), the Chaire European Electricity Markets (Université Paris-Dauphine), and i3 (l’Institut interdisciplinaire de l’innovation), members of PSL. It is animated by François LEVEQUE (MINES PARIS TECH), Dominique FINON (Chaire European Electricity Markets, CNRS-CIRED) and Patrice GEOFFRON (Director, CGEMP, Université Paris-Dauphine).
Bettina Hirl, Assistant, Università della Svizzera italiana (USI, Lugano, Switzerland)
Rational Habits in Residential Electricity Demand
Presentation
In this presentation we use a novel approach to improve the understanding of the dynamics of residential electricity demand and the effects of eventual energy policies. Rational households looking at the constant maximization of utility over time would also take expectations about future prices or consumption of electricity into account when making their consumption and investment decision. Hence, expectations about future prices or consumption may have an impact on current decisions. To our knowledge, none study on residential electricity demand considers expectations about future consumption or prices. A recent exception, focused on gasoline by Scott (2012) estimates rational habit models for gasoline demand in the US, but it is focused on the price as leading explanatory variable. In this paper we use the lead of consumption in our theoretical model. So we propose a rational habit model with forward looking consumers for residential electricity demand. We estimate lead-consumption model using fixed-effects, instrumental variables, and the GMM Blundell-Bond estimator. We find that expectations about future consumption significantly influence current consumption decisions, which suggests that households behave rationally when making electricity consumption decisions. This novel approach may improve our understanding of the dynamics of residential electricity demand and the evaluation of the effects of energy policies.
CERT-ETHZ Working paper co-authored with Massimo Filippini, Professor at ETH Zurich and USI (Lugnao).
Luis Mundaca, Associate Professor, International Institute for Industrial Environmental Economics (IIIEE), Lund University (Sweden)
Behavioural Energy Economics: Drivers, Concepts and Policy Implications
Presentation
How behavioural failures affect the adoption of low-carbon energy technologies? How behavioural barriers are treated in modelling exercises? What can behavioural economics say about the design of policy instruments? These are some of the questions that this presentation addresses. A critical review of the rational choice theory and technology paradigm that dominates energy and climate policy assessments is presented. Major assessments, initiatives and E-3 models are discussed and confronted with key concepts and research gaps from a behavioural science perspective. The growing discipline of Behavioural Energy Economics is outlined and research focusing on standard vs. behavioural-oriented real-time feedback in Nordic countries is presented.
